Unresolved West Asia crisis and concerns over the impact of elevated oil prices on domestic macro and corporate earnings continue weighing on Indian stock market sentiment.
Benchmark Sensex crashed 493 points, or 0.63%, to end at 77,235.46 on Tuesday, 18 August, while the NSE barometer Nifty 50 extended losses for the sixth consecutive session, ending with a loss of 133 points, or 0.55%, at 24,154.90.
The Nifty Midcap 100 index also lost 0.43%, while the Nifty Smallcap 100 ended flat.
Over the last sessions, the Nifty has lost 1.7%. Sensex, on the other hand, ended lower for the third consecutive session, overall shedding 1%.
The advance-decline ratio tilted in favour of decliners, as of the 4,500 stocks traded on the BSE, nearly 2,400 ended lower while some 1,900 rose.
The biggest worry for the domestic market is elevated crude oil prices, which have fanned fears that India's fiscal condition could be strained, inflation could spike, the rupee could weaken further, and foreign capital could flow out aggressively.
Oil price benchmark Brent crude traded near $91 per barrel when the Sensex closed, as the US-Iran conflict remains unresolved. Iran has rejected US President Donald Trump’s claim that he could declare the Strait of Hormuz a US territory. As per media reports, Iran has warned of a ‘timely and precise’ attack if US diplomacy fails.
"Crude oil remained the primary drag on market sentiment, while rising U.S. bond yields and weak global cues prolonged the risk-off trend in Indian equities. Investor anxiety increased as hopes for a Middle East resolution faded following the expiration of the temporary U.S.-Iran ceasefire, heightening concerns about renewed inflation," Vinod Nair, Head of Research, Geojit Investments, noted.
"Elevated U.S. yields further reduced the attractiveness of emerging markets, and IT stocks led losses amid fears that persistently high interest rates could dampen global technology spending. Although domestic fundamentals continue to be supportive, sustained high crude prices and rising input costs could pressure recent earnings upgrades, prompting investors to remain cautious in the near term," said Nair.
As many as 40 stocks ended in the red in the Nifty 50 index, with Tata Motors Passenger Vehicles, Asian Paints, Infosys, Wipro, and HCL Technologies among the top laggards, each dropping over 2%.
On the other hand, Axis Bank, Max Healthcare Institute, Mahindra and Mahindra, Grasim Industries, and Power Grid Corporation of India ended as the top gainers in the index, rising up to 1%.
Nifty IT lost 1.93%, ending as the top loser among sectoral indices. It was followed by Nifty Realty (down 1.42%) and PSU Bank (down 1%). Bank Nifty dropped 0.41%.
Vodafone Idea, Motisons Jewellers, Milky Mist Dairy Food, Cupid, PC Jeweller, and Suzlon Energy were the most traded stocks in terms of volume on the NSE.
Despite stock market weakness, as many as 180 stocks, including Bosch, GlaxoSmithKline Pharmaceuticals, Lenskart Solutions, and Solar Industries India, hit their 52-week highs in intraday trade on the BSE.
On the flip side, some 91 stocks, including ITC, IRFC, KEC International, and Procter and Gamble Hygiene and Health Care, hit their 52-week lows in intraday trade on the BSE.